BRATTLEBORO, Vt. -- In a surprise announcement that went out by Twitter just before 9 a.m. on Tuesday, Entergy announced it would be shutting down Vermont Yankee Nuclear power plant sometime in late 2014.
"Today is an extremely tough day for us here at Entergy, and more importantly for the 630 employees at Vermont Yankee," said Bill Mohl, the president of Entergy Wholesale Commodities, during a press conference at Entergy headquarters on Old Ferry Road in Brattleboro Tuesday afternoon. "Earlier this morning we told these men and women that Vermont Yankee nuclear power station will stop operating at the end of its current fuel cycle and move into the decommissioning process in the fourth quarter of 2014. The exact date is still to be determined."
The decision to close the plant was made during a board of directors meetings on Sunday night, said Mohl, and the decision was "an extremely tough call for all of us."
"I can personally tell you that this was an agonizing decision," said Mohl, especially when the board had to consider the fate of the more than 600 employees at the plant.
"We recognize that closing the plant on this schedule was not the outcome they had hoped for but we have reluctantly concluded that it is the appropriate action for us to take under the circumstances."
Mohl said the decision to stop producing power at the plant was based on the economics of the plant, and not operational performance, litigation risks or political pressure.
"Simply put, the plant costs exceed the plant's revenues and this asset is not financially viable. Despite its excellent track record, Vermont Yankee is a single, small-unit nuclear station operating in a very challenging marketing environment."
Mohl said the decision to close Yankee in the fourth quarter of 2014 was based on a number of factors.
First and foremost, he said, are the natural gas markets that have undergone a transformational shift in supply due to the impacts of shale gas resulting in sustained low natural gas prices and wholesale energy prices.
Second, he said, the plant has a high-cost structure as a single-unit plant.
"Since 2002, we have invested more than $400 million in the safe and reliable operation of this facility. In addition, the financial impact of cumulative regulations is especially challenging to a plant in these market conditions."
The third factor was what he called "wholesale market design flaws (that) continue to result in artificially low energy and capacity prices in the region and do not provide adequate compensation to merchant nuclear plants."
While energy producers such as Entergy and ISO New England, the regional grid operator, are developing a strategy to identify and gain support for potential market solutions that could receive approval from the Federal Energy Regulatory Commission, said Mohl,
"Resolution of these issues is not certain and will take a significant amount of time."
Mohl said a number of months ago, Entergy began "an intense evaluation" of Vermont Yankee's financial viability, but did not go into the process with the goal of shutting down the plant.
"We are constantly evaluating our portfolio of assets and businesses to determine if it makes sense to hold and optimize, to sell or to shutdown," said Mohl.
Even with the realization that continued operation wasn't financially viable, he said, the management team had a number of other discussions about the plant's future.
"We considered very carefully the effect of this decision on our four stakeholder groups: our owners, our employees, our customers and our communities. While extremely tough for many, we are confident the decision is ultimately the right one. For our employees, it provides them with the best opportunity to properly plan their future, whether at the plant, at other Entergy-owned facilities or the broader industry."
Despite the decision to close Yankee, said Mohl, Entergy remains committed to nuclear power as an important part of its portfolio because no other power source can provide a reliable and sustainable source of electricity that is carbon free, reliable and "around the clock."
"I especially want to recognize our employees at Vermont Yankee. They are an amazing group of professionals who have done everything we've asked including running this plant safely and reliably and also establishing this plant as one of the best places to work in the entire state of Vermont," said Mohl. "They generated electricity safely and reliably day after day and year after year and we are extremely proud of them. We absolutely will treat them fairly and assist them through this difficult transition. We believe an orderly shutdown decision provides our employees the best opportunity to properly plan their future. We will also insure the plant is properly staffed and safely operated until it is shutdown and ultimately decommissioned."
Mohl thanked the many supporters "who have stood by us and our employees for so many years. We hope they understand the economics were too challenging to keep the plant operating in the future."
Jeff Forbes, Entergy's chief nuclear officer, said the primary focus over the next year will be to operate the plant safely and reliably. "Safety will be a top priority as we move into the shutdown and decommissioning process," said Forbes.
He noted that over the past 10 years, Yankee has achieved a capacity factor of 92.4 percent and had operated the plant "breaker to breaker" for 496 days in between refueling outages.
He credited the employees of Yankee for that distinction, noting they are a "dedicated and resilient group of men and women."
"This team has shown us ... no matter what is going on, they safely and reliably generate the electricity that powers life," said Forbes.